I Take Exception — My Rebuttal

NV Controller Ron Knecht’s “2nd Monthly Report” was published last week in the Humboldt Sun.  I took exception with much of what he had to say.  Below are his  report and my rebuttal which was published in the second edition of this week’s Humboldt Sun:

Mr. Knecht’s Report:

Knecht01The second Controller’s Monthly Report is now on the state web site (www.controller.nv.gov). It addresses state revenues, while the first one reviewed state spending. In sum, its findings are …

Nevada state revenues include taxes, federal and other grants and contracts, plus charges for services that have amply served the public interest. Both total tax revenues and charges for services have increased slightly relative to Nevada’s economy and the incomes of Nevada families and businesses since 2008. Total state revenues have increased at roughly the same rate as state spending, and both spending and taxes have grown significantly faster than our economy, proving again that we have a spending problem, not a revenue deficit.

Every cent taken in taxes is an act of destruction of human and social well-being; so, public spending items should not be adopted unless they clearly provide benefits exceeding the damage done by taxes required to support them. The essence of sound fiscal policy is to deploy only the least destructive tax methods and most beneficial spending measures, and to find the taxing/spending balance point that maximizes net social benefits and public wellbeing.

All taxes are “unfair” because they can’t be charged according to the social costs that people cause, nor the benefits they receive. Fairness being illusory, in taxation and other public policy, we should seek to maximize economic growth and the human well-being that growth fosters. “Ability to pay” criteria, which have a superficial ring of fairness, and “redistribution” policies are particularly destructive to the broad public interest in growth. And claims that taxing one person to subsidize another involves “compassion” are false.

The real tax fairness issue is that public spending’s beneficiaries — public employees and contractors, plus those receiving public payments — have an unfair political advantage over taxpayers and the public, an advantage that produces excessive taxing/spending levels.

So, consider the recent fortunes of taxpayers and public employees. In the last six years, Nevada taxpayers’ average incomes declined by nearly 8 percent (from $39,079 in 2008 to $36,039 in 2010) before rebounding slowly back to prior levels ($39,173 in 2014). State employees took 4.6 percent cuts via furloughs for a couple of years, followed by a combination of furloughs and actual pay reductions still totaling roughly 4.6 percent. At present, they still must take furloughs equal to cuts of about 2.3 percent.

So, state employees in general have borne roughly the same burden from our economic troubles as have taxpayers. Considering the total package — pay, benefits and job security — state employees in Nevada essentially get total compensation at market levels. Local government employees, on the other hand, have taken fewer, if any, pay cuts and many have continued to get increases. In Clark and Washoe counties, their total compensation levels are much higher than market levels prevailing in the private sector.

The accumulated and ever-increasing over-reach of government is greatly responsible for the slow economic growth of recent years and the prospects of the same in the future. So, voters, taxpayers, Nevada state employees and the broad public interest are victims of government excess, while local public employees are to some extent beneficiaries.

All these considerations reinforce the conclusions of Controller’s Monthly Report #1 that to leave our children a better future, we must stop the growth relative to the economy and to Nevadans’ incomes of public spending that drives taxes. We must especially avoid mistakes such as adopting versions of the business margins tax defeated 4-1 by voters last November. We must restructure fiscal processes for real budget constraints and effective cost management, emphasize no- and low-cost reforms in K-12 education and end public employee collective bargaining and prevailing wage rules.

My rebuttal to his partisan ideological propaganda:

Vickie14smI have some serious problems with Mr. Knecht’s “Commentary” in the 3/13-16/2015 Humboldt Sun.

”Every cent taken in taxes is an act of destruction of human and social well-being?”  Really?  Mr. Knecht doesn’t believe in ANY public commons?  He doesn’t believe in public roads? Or public water and systems? Or police and fire fighters? Or public schools and universities?  I’m sorry, but all of those do promote “human and social well-being” and they’re all part of OUR public commons created using OUR tax dollars.  So exactly what is Mr. Knecht proposing, selling off all of our “public commons” at fire-sale prices to the “deserving” richest among us, all so THEY can charge us by the mile, by the book or test, by the flush or by the flame? What about the police?  Is he proposing we should submit to a “Robocop” scenario across the state?  Isn’t that why our fore-father’s fled Europe?  To flee the tyranny of the rich who oppressed those beneath them?

“All taxes are unfair because they can’t be charged according to the social costs that people cause, nor the benefits they receive?”  What does that even mean?  That we should bestow OUR public commons to corporate parasites that pay NO taxes just because they might be the bearer of jobs?  Isn’t it “corporations” that consume our infrastructure and pollute our lands and waters at the greatest rates, causing destruction of human and social well-being?  Isn’t it the corporations that choose NOT to pay a living wage NOR to provide health benefits to their workers, leading to the destruction of human and social well-being?  Isn’t it those same workers who now, no longer have an “ability to pay,” again, leading to the destruction of human and social well-being?  Is that really what Mr. Knecht’s “fair way to run our country” would look like?

Then there’s his rant about public employees.  Every cent of Mr. Knecht’s paycheck is paid with public tax dollars. That makes Mr. Knecht a PUBLIC employee. What makes him believe he’s so infinitely better than police, firefighters, teachers, or even a clerk at a local DMV?

He may talk fondly about our kids/grandkids, but that’s just a ruse, a distraction. He does make his intentions clear: to do everything he can to stifle/gut K-12 education programs that might make our children competitive and productive in an ever changing economy.

I disagree with Mr. Knecht and with that for which he stands. Instead of looking for ways to improve our “human and social well-being,” he’s apparently looking for ways to destroy it.  I fear that our “investment” in his paycheck will yield only negative dividends for the everyday Nevadan before all is said and done.

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Is Ron Knecht rewriting history?

—by Rich Dunn, RNDC 2nd Vice Chair

In a Nevada Appeal op-ed, Controller-elect Ron Knecht laid out the premise for his ultra-conservative world view as follows:

“For 125 years, we’ve seen the rise of the dysfunctional politics of Progressivism. As it
has accelerated in the last five decades, we’ve had slowing economic growth and reductions in individual liberty, prosperity, opportunity and hope.”

I doubt that Mr. Knecht was referring to the short-lived Progressive parties of Theodore Roosevelt (1912), Robert La Follette (1924) or Henry Wallace (1948), so I’ll assume that he was actually referring to progressivism with a lower-case p. So what is that?

Wikipedia observes that “American progressives tend to advocate progressive taxation and oppose what they describe as the growing and negative influence of large corporations. Progressives are typically in agreement on an international scale with left-liberalism in that they support organized labor and trade unions, they usually wish to introduce a living wage, and they often support the creation of a universal health care system.”

All of the above have been around in one form or another for the past 125 years, and for lack of a better word we can agree to refer to them collectively as “progressivism.” And according to Ron Knecht, those progressive ideas have driven the “dysfunctional politics” he sees as responsible for “slowing economic growth and reductions in individual liberty, prosperity, opportunity and hope.”

I have no clue what Ron Knecht thinks of as individual liberty, prosperity, opportunity or hope, so I’ll leave those aside, but economic growth is something that can be objectively measured, so let’s do a fact check on that part of his world view. Knecht seems to believe that economic growth has been slowing for the past 125 years, and that perceived slowing has “accelerated in the last five decades.” So, is that a true statement? Let’s see.

Looking back 125 years, we find that nominal GDP in 1889 was $14 billion, which is $360 billion in 2014 dollars. That is 1/47th the output of today’s economy. And US GDP fifty years ago (1964) was 743.7 billion, which is $5.71 trillion in 2014 dollars. That is only 1/3rd of today’s $17 trillion GDP. I’m not an economist, but to my mind those numbers reflect a pretty robust rate of economic growth.

Perhaps the best test of Ron Knecht’s thesis that progressivism is bad for economic growth is to look at the years immediately following the Crash of 1929. That will let us contrast the effects of Hoover’s pro-cyclical regressivism to Roosevelt’s counter-cyclical progressivism. Here goes: GDP growth in 1930 was -8.5%, in 1931 it was -6.4%, 1932 -12.9%, 1933 (FDR took office in April) -1.3%, 1934 +10.8%, 1935 +8.9%, 1936 +12.9%, 1937 +5.1%, 1938 -3.3%, 1939 +8.0%, 1940 +8.8%, 1941 +17.7.

It should be noted that the recession of 1938 followed FDR pulling back on his counter-cyclical progressive policies at the urging of conservatives in his own party. The hope was that the economy already had enough momentum to grow on its own (bad guess).

Conservative ideologues routinely make the same kind of mistakes here in the 21st century, as witnessed by the tea party’s on-going temper tantrum over counter-cyclical recovery measures like QE, TARP and the ARRA. Unlike real world conservatives like George W. Bush and his treasury secretary Hank Paulson, they don’t understand that the public and private sectors do not compete in a developed economy, they are in fact complementary.

Knecht ties off his progressivism-slows-growth argument with this counter-factual assertion: “Now, after a six-year blowout of it since the Great Recession, we’re mired in a long-term non-recovery it has caused.” Why do I call that counter-factual? Well, think about it…

In response to the Global Financial Crisis, European governments responded with austerity: pro-cyclical fiscal policies that drove the EU as a whole into a prolonged period of near-zero growth and southern Europe into an outright depression, with unemployment rates over 25% in Greece and Spain and joblessness up to 50% among the under-30’s.

Contrast that with the US, which was fortunate enough to have Democrats in control of both houses of congress when the financial crisis hit in September 2008. The progressive counter-cyclical response turned what was clearly an impending economic depression into a recession that was over in just a few months.

Today, after 56 months of continuous job growth, the US unemployment rate is under 6%, the economy is growing at a robust 3.5%, gasoline is under $3 a gallon, the stock market is at an all-time high, and the federal budget deficit has been cut in half, not to mention that ten million more Americans can afford to see a doctor when they get sick.

Not too shabby, and I can tell you this with total certainty: Were that the record of a Republican president, Fox News, Rush Limbaugh, Sean Hannity et al would be crowing about it around the clock. But they are all about politics, not reality, so all you’re going to hear about is “Obama’s failed agenda.” Yeah, right.

Who is Andrew Martin?

If you were at Winnemucca’s Labor Day Parade or the Pancake Breakfast on Saturday, you would have had an opportunity to meet and talk to or at least wave at Andrew Martin who is running for State Controller on the November ballot.

As an Assemblyman and member of the Economic Forum Andrew has worked on Nevada’s budget, understands our finances, and knows what needs to be done to improve our economy.  Andrew  is a business owner, Certified Public Accountant (CPA), Certified Fraud Examiner (CFE), Certified in Financial Forensics (CFF), and Certified Internal Controls Auditor (CICA). Mr. Martin has over 28 years of professional experience providing accounting, advisory, audit and tax services to a diverse group of business, individual, governmental, and non‐profit clients.

His opponent, Ron Knecht,  is a “limited government conservative” who was a member of the “Mean 15” and who has signed onto Grover Norquist’s “Taxpayer Protection Pledge” of no new taxes.  He’s a proudly professed NRA member (who also proudly supports “campus concealed carry) and who was elected to the Nevada Assembly once and NOT returned.  But, most importantly, where Andrew clearly holds certifications beneficial for the job, Mr. Knecht is a Mechanical Engineer by profession and has managed a few budgets and made a few investments.

Really?  That’s the best fiscal and financial expertise the Republican Party has to offer up? Somebody who diligently works side-by-side with Sharron Angle to shut government down?

“Fiscal responsibility, transparency and accountability isn’t just a campaign slogan, it is what I believe in, and they are the principals by which I will operate the Office of the Controller.” — Andrew Martin

As our Nevada State Controller, Andrew Martin has pledged to:

  • Strengthen the State’s fiscal oversight and accountability, which will benefit the economic health of Nevada and improve our outlook for the future.
  • Assure that our tax dollars are being spent wisely to accomplish tangible results, linking dollars spent to measurable outcomes that are tied to state-wide priorities, such as higher student test scores, lower crime rates, and a healthier population.
  • Collect debts owed to the State so that Nevadans who work hard and pay sales, gas, real estate and other taxes don’t have to carry the load for businesses that don’t.
  • Make sure the worldwide financial community knows that Nevada is a great place to invest, improving Nevada’s business climate, boosting our economy and stimulating job creation.

Personally, when I’m looking to hire a State Controller, I’m looking for someone who is pledging to do what’s best for Nevada’s citizens, not someone who is beholding to Grover Norquist, someone who doesn’t live in Nevada, and who most likely knows absolutely NOTHING about the needs of Nevadans.  I don’t know about you, but I’m planning to pony up to the voting booth during early elections to cast my vote for the best qualified candidate for the job: Andrew Martin!

Really? Updated College Sexual Assault Prevention Guidelines are Federal Overreach?

by Zach Hudson, NSDP Communications Director

Remember Todd Akin, the GOP Senate candidate in Missouri who talked about “legitimate rape?”  Akin’s comments were ignorant, insensitive, and out-of-touch.  Which is why we were disappointed Nevada Republicans seem to be taking their cues on women’s health from Todd Akin.

Last week, the Republican nominee for Nevada Controller, Ron Knecht, wrote an op-ed where he essentially said new guidelines to prevent sexual assault on college campuses are an example of federal overreach.  He even blamed programs to prevent sexual assault for the increase in college tuition!

Let’s make sure Republicans like this never get elected to office – join Democrat Andrew Martin’s campaign for Controller by clicking here today.

Ron Knecht’s comments were moronic, but unfortunately not surprising.  Whether it’s Sen. Dean Heller’s support for restricting access to contraception, Rep. Joe Heck’s votes to ban abortion for rape victims and to weaken the Violence Against Women Act, or Nevada Republican Senate Leader, and former Tom DeLay operative, Michael Roberson, supporting “personhood” measures which could outlaw forms of birth control, Nevada Republicans time and time again demonstrate they are completely clueless when it comes to women’s health.

Fortunately, Nevadans have a clear choice in the election for State Controller.  While Ron Knecht is focused on criticizing programs to help sexual assault victims, Democratic nominee Andrew Martin will focus on managing the state’s finances.

Click here to join Andrew’s campaign and tell Nevada Republicans when it comes to women’s health decisions, #ItsNotUpToThem.